The United Steelworkers (USW) union filed petitions with the International Trade Commission (ITC) in June 2014 for countervailing and antidumping duties against Chinese passenger and light truck tires.
In its petitions, the USW complained that Chinese imports had soared since the end of Section 421 tariffs in September 2012. The Commerce Department made a preliminary determination Dec. 1 finding material injury in the countervailing duty case, and is scheduled to make its preliminary determination in the antidumping duty case Jan. 21.
TIA remains opposed to duties on passenger and light truck tires, although it sees them as likely.
“When you look at the issue, Obama's on safe ground,” Roy Littlefield III said. “He can do a favor for the unions while saying he's protecting American jobs.”
TIA, however, sees the issue as skewing free trade and tire distribution without any real benefit to the economy. “The average retailer carries seven or eight brands of tires, and there are reasons for that,” he said. “One of those reasons is cost.”
TIA plans to meet with Commerce officials before the January antidumping ruling, according to Mr. Littlefield. However, the association has not taken any position on duties against Chinese off-the-road tires, although Mr. Littlefield said he is puzzled by the change at the Commerce Department in determining antidumping duties.
“It used to be that the petitioner had to prove that the tire was being sold at less than fair value,” he said. “Now, Commerce can justify a 105-percent duty against Double Coin by determining a percentage of ownership.”
Along with tire registration, legislation to fund the nation's transportation infrastructure — and what it might contain — will be the focus of TIA's Federal Lobby Day, according to Mr. Littlefield.
“Don't Let the Highway Bill Jeopardize Your Business” is the headline for the first of TIA's Federal Lobby Day fliers. The current stopgap measure signed by President Barack Obama last August lasts only until May 2015, and its successor, TIA said, could contain many things detrimental to tire retailers and retreaders. These include:
- An increase in the motor fuel tax of anywhere from 15 cents to $2 per gallon;
- Reinstatement of the federal excise tax (FET) on passenger tires;
- A 10-percent increase of the truck tire FET;
- Reinstatement of a tax on tread rubber of 5 to 15 cents per pound; and
- A 10-percent increase of the FET on trucks and truck parts.
“Our infrastructure's falling apart, and we have to fix it if we want a sound economy,” Mr. Littlefield said. “The question is how you're going to pay for it.”
With both houses of Congress in Republican control, legislation to repeal or revamp the Affordable Care Act seems virtually certain. Meanwhile small businesses must cope with some difficult provisions in the health care law, Mr. Littlefield said.
“It's very unfortunate how the Affordable Care Act is playing out in the workforce,” Mr. Littlefield said.
Because of the clause exempting small businesses from providing health care benefits to employees working less than 30 hours a week, small businesses are cutting hours for formerly full-time employees to avoid dealing with the law, he said.
“This was an unintended effect of the law, and it's bad for everyone,” he said.
Estate tax/tax extenders
The 113th Congress ended late on Dec. 16 with passage of a bill temporarily extending various tax breaks for individuals and businesses, including several popular with small business. These include expedited expensing of capital investments and the Work Opportunity Tax Credit, which allows small businesses to deduct a portion of the first-year wages of disadvantaged workers.
One tax break TIA and other small business associations advocate is repeal of the estate tax, which they have advocated for many years.
“I think we'll get a bill through Congress for the first time in years,” Mr. Littlefield said.
“But it will be more symbolic than anything,” he said, since President Obama has promised to veto any bill repealing the estate tax.
Even more worrisome to TIA than the estate tax is the potential repeal of LIFO, the “last in, first out” accounting system that assumes that assets produced or acquired last are the ones sold, used or discarded first.
If LIFO is repealed, it would cost small business an estimated $80 billion in the first year alone, according to Mr. Littlefield.
“We're lobbying a lot right now to save LIFO,” he said. “Many members of Congress are sympathetic to LIFO, but they don't want to go public. LIFO repeal could go into a tax package, and they don't want to go back on their promise to raise revenue without raising taxes.”
Many initiatives at the Environmental Protection Agency (EPA) affect the tire industry either directly or indirectly, according to Tracey Norberg, RMA senior vice president and general counsel. The RMA participates in many coalitions following broad EPA actions, such as one monitoring the pending National Ambient Air Quality Standard for ozone, she said.
One EPA action affecting the tire industry directly is its request for comments on the use of biomass as an energy feedstock, according to Ms. Norberg.
“Scrap tires are being treated favorably because of their natural rubber content,” she said. “This is a real opportunity to promote an end-use for tires as fuel.”